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Murren and Lee say they and others discussed forming a partnership with Schaeffer in 2002 that would own a vineyard and winery.

They say Schaeffer sought capital contributions from them for the proposed partnership and when doing so either stated or implied that they were part-owners of the Woollaston Estates Vineyard, which has since changed its name to Mahana.

They allege that Schaeffer, after 2008, made further representations to them that they were part owners of a vineyard and winery in New Zealand.

Mullen says he and his trust have personally paid Schaeffer US$1.6 million while Lee says he paid US$700,406.

"Mr Mullen and Mr Lee say that all the representations made to them were false, as they have no interest in Woollaston Estates Vineyard and Winery. They say the payments they made were not used to make the investments promised in the representations made to them, but were instead used by Mr Schaeffer to acquire the assets he now holds in his capacity as a shareholder of WEHL [Woollaston Estates Holdings]," Associate Judge John Matthews said earlier this month.

The pair's case alleges the representations breached the Fair Trading Act, that Schaeffer breached a duty of care he owed and that he knew the representations were false.

Mullen and Lee want judgment against Schaeffer for the amount they allegedly paid him, plus interest.

Last month, Schaeffer attempted to get the case dismissed or put on hold on the basis a New Zealand court was not the most suitable and appropriate forum to hear the claims.

He says the case had more of a connection with the United States.

While Murren and Lee have visited New Zealand, the alleged representations were said to be made in Nevada, where Schaeffer lived until early 2013.

Associate Judge Matthews commented that an unusual feature of the case was that Schaeffer, who lives in New Zealand, was pushing for it to be argued in Nevada.

This was because Schaeffer believed having the case here would result in more publicity.

The judge, however, did not think this issue favoured the case happening in the US.He said the majority of the pair's claims are based on New Zealand law, that the court had the jurisdiction to decide them and that Murren and Lee were prepared to travel to this country to give evidence.

"I find that Mr Schaeffer has not established that this case could be more suitably tried in Nevada, in the interests of the parties and for the ends of justice ... the application to dismiss or stay this proceeding is dismissed," Associate Judge Matthew said.

The Herald understands that Schaeffer has applied to have a more senior judge review the decision, but his lawyer would not confirm that and said he would not be commenting.

Schaeffer, who formerly headed the Mandalay Resort group in the US, has given substantially to the arts in New Zealand.

He is founding patron and benefactor of Victoria University's International Institute of Modern Letters.